Mumbai: India, the second largest supplier to the UN emissions market, received 51% less carbon credits in the five months through May as regulators scrutinize the country’s projects.

Issuances of Certified Emission Reduction (CER) credits to India in the UN Clean Development Mechanism, the world’s second biggest greenhouse gas market, fell to 5.86 million, from 11.96 million in the same period last year, according to UN data on Bloomberg. Worldwide issuance rose 13% in the period.

The trend is striking, said Anmol Singh Jaggi, director of Gensol Consultants Pvt. Ltd in Ahmedabad, which advises and brokers on carbon projects.

The European Union may restrict eligibility of UN CERs in its emissions programme, the world’s largest, as it favours projects such as wind farms to combat global warming over credits awarded to projects to reduce emissions of hydrofluorocarbons, or HFCs.

About half the CERs issued since October 2005 stem from plans to cut HFCs, used in the production of chemicals for air conditioning and refrigeration. Both India and China, big beneficiaries of credits awarded to HFC-reduction programmes have been hit by this move.

The UN is holding back on awarding credits to projects involving HFCs and hydropower, Jaggi said. Hydropower projects are under scrutiny for signs that they may have been financially viable without CERs, violating UN market regulations, he said.

The CDM, which awards tradable credits to investors who fund emission-reducing projects in developing nations, issued 2.98 million credits to HFC projects in India between January and May, down 64% from the same period last year. Issuances to hydropower projects declined 59% to 103,744, according to Bloomberg calculations.

CER credits for December delivery declined 0.9% to €12.31 ($14.97) a tonne on London’s European Climate Exchange at 12:16pm on Wednesday in London.